Banking Services in India.

Banking services in India started way back in the 18th century with the Bank of Bengal opening up in Calcutta in 1906. The other two banks that opened up simultaneously were Bank of Bombay and Bank of Madras. These three merged together to become Imperial bank of India which after independence became State Bank of India. As of today banks in India are segregated into different groups, each having their own benefits & limitations of operating in India along with their dedicated markets. Some banks, mostly co-operatives operate in rural sectors where as the bigger ones, the multi-banking sectors caters to rural & urban both. With passing years banks are increasing their range of services to their customers. With stiff competition and advancement of technology, the services provided by banks have become more easy and convenient. Right from deposits to withdrawing to transfer of fund from one branch/area to another anything could be done in an instant. Availing loans and card banking has made things simpler for the customers. Gone are the days when you had to stand in a queue to encash your cheque or gathering money from all sources to make a major purchase. Card banking has also gain huge popularity with majority of transactions in today’s times being done with ATM cards, credit cards & debit cards.

In the last decade the financial markets of India shot up unexpectedly. Since 1990 every other state government took major steps in reforming the financial sector of their respective states. Important sections such as financial markets, regulators, banking systems, non- banking financial companies, capital markets, mutual funds & consolidation imperatives were handled with apt maturity. In case of financial markets private sector institutions played an important role. They grew rapidly in commercial banking and asset management business. With the openings of insurance competition arose which gradually helped reduce the interest rates. Regulators such as the reserve bank of India became more independent and the insurance regulatory and development authority became more important institutions. Public Sector Banks still dominate the commercial banking system with their shares being enlisted in the stock markets. Capital Markets actively bring in customers to trade in stocks and bonds and with the introduction of various mutual fund schemes more investments on different assets are being made thereby making the regulation of finances all the more convenient.

As of today (2008), Banking Services in India is generally fair & mature in terms of supply, though reach in rural India still remains a challenge for private sector & foreign banks. In terms of quality of assets & capital adequacy, Indian banks are expected to have clean balance sheets compared to other foreign or private banks. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate. With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. Currently, India has 88 scheduled commercial banks, 27 public sector banks, 29 private banks & 31 foreign banks. This just shows as to how far the Indian Banking Services have improved since its creation.